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Tag: Panama Papers

Confusing, contradictory times, when lawmakers require us to lock-down data whilst revealing their intimate thoughts on Twitter. Times when it is OK for a dominant search engine to track our billions of tiny searches, for our wrist watch to measure and transmit our sleeping and walking in the name of fitness. Times when we choose to tell our life stories in Facebook.

And times when our private underbelly is revealed to the world. Two stories have exposed privacy in all its moral complexity; the Panama Papers, and the Ashley Madison data breach. Both have been stories about activities that are legal (being a director of an offshore company and having an affair, or both simultaneously, are not illegal activities.) Both are about normal immorality.

Both stories are to some degree about power. The Panama Papers show us that the powerful are willing to mix their businesses with drug dealers, dictators and money launderers in order to avoid taxes. If you need to be reminded about just how powerful these people are, bear in mind that just one person was prosecuted out of the 1,000 UK names released in the last big tax-related data breach; the Falciani/HSBC affair [Source: ‘Tax Havens don’t need reform, but abolition’, Richard Brooks, Guardian Weekly, 8/4/16]

Both the Panama Papers and Ashley Madison are about relationships, a subject at the heart of prospect research. John knows Jane because both of them invest in the same company in the British Virgin Islands. And John knows Mary because he signed up for Ashley Madison and she’s his new friend.

John is a donor to your charity. He’s in your database, and he has turned up in a screening (carried out, naturally, by Factary). We’ve spotted him in Companies House, a public domain data set, as a director of an investment firm in Holborn, so we have flagged him as interesting.

When you transferred the data to Factary you took the utmost care over the process, using our sFTP (secure FTP) site and thus ensuring that John’s details were encrypted and safe. You checked that the computer link was over a HTTPS network. You made sure that the data would be stored in servers in the UK, in a physically safe and secured building. You did that because you are a conscientious prospect researcher, using the best practice required by the law.

John did not take the same care. When he invested in the British Virgin Islands via Mossack Fonseca he did so through the open web, by email. He joined Ashley Madison the same way, signing up on their website; no encryption, no security. Worse, he was voluntarily exporting his data outside of the protection offered by the European Union through its Data Directive.

And now John has a photograph of him and Mary together at a work conference and he’s posted it on his Facebook page.

Where is the edge of privacy?

Is it the frontier between long standing public domain records and the new stuff, between Companies House and Facebook, for example?

Is it between voluntarily released information and stuff that is Wikileaked?

Is it between Victorian morality and modern – between a marriage notice in the Telegraph, and Ashley Madison?

Above all, is it where people of power dictate it should be? So that we are allowed to see the company directorships of the little people, but cannot see into the murky world of British Virgin Islands connections? Or into the equally dark corners of political connection and patronage?

This is where we are, like it or not, in prospect research. Prospect researchers live on the edge of privacy, using personal information that is in the public domain, for public good. We research John Doe in order to help our fundraising colleagues reach out to him for a donation that will benefit a poor person, or a scholarship kid, or an eye-opening cultural event.

But the power of research comes with a responsibility; it is our profession that must lead the debates on power and privacy, on public domain and private.

Thank goodness it is us, because prospect researchers have a special moral compass. We have chosen to work for causes we believe in, to make sacrifices (anyone want to talk about pay rates for researchers?) for something we believe to be right and good. We have chosen not to sit in the glory seat in fundraising; we are clearly not in this for vanity or fame. We know the value of information, and we have seen the intimacies and the inanities that people are willing to share on the web. We chose every day between information that is right and relevant, and rubbish.

Prospect researchers are the best placed people in the non-profit sector to describe where a private life becomes public.

But we had better get out there and get talking; our donors, our colleagues and our organisations need our guidance as we walk, together, along the edge of privacy.

We prospect researchers say it all the time. But I’m not sure that our fundraising colleagues really get it.

It’s immeasurable. No, we cannot give you a precise figure.

An individual’s wealth is a private affair. Just how private is being made clear by the Panama Papers. Here we can see how people from footballers to political leaders hide their wealth and their income from public view. These are just the types of people that we prospect researchers are asked to analyse and measure; what is her wealth, and what is her gift capacity?

Bear in mind that Mossack Fonseca is described as Panama’s fourth largest firm in this offshore business. The Legal 500 lists five more leading firms operating in this sector in Panama. There are hundreds more in Panama, and more in the British Virgin Islands, Cayman, Gibraltar and any number of other fiscal watering holes. We are seeing, even with the 2.9 terabytes of information from Panama, only a tiny slice of the full picture.

The OECD reports that 27 of the 34 OECD members “store or require insufficient beneficial ownership information for legal persons, and no country is fully compliant with the beneficial ownership recommendations for legal arrangements.” In other words, as campaigners such as Andy Wightman have shown in his books on land ownership in Scotland, we cannot know who owns companies or who controls trusts.

The UK is rolling out regulations that will expose some of this – although information on the control of trusts (not the charitable sort, these are legal trusts) will only be available to ‘competent authorities.’ A grey phrase that, we can assume, excludes the, er, incompetent public. Business shareholdings of 25% or more will mean a declaration of beneficial ownership. It is worth noting that many of the schemes outlined in the Panama Papers involve small but valuable shareholdings. As Jake Hayman has already noted in Forbes, this is relevant to philanthropy.

The Panama Papers have many implications for prospect researchers. They are another mine of information – you will have to decide for yourself whether this is good practice, or not – on wealth. They remind us that we must be cautious with our estimates of wealth and gift capacity. And they demonstrate that our due diligence is less than comprehensive; if we cannot know who controls a business that wants to donate to us, or we cannot say which companies Samantha Supporter controls, then how can we measure whether she meets our due diligence requirement?

I suggest sticking this version of The Panama Papers on the door of the Prospect Research office in your organisation:

1. No, we can’t tell you how wealthy she is
2. No, we can’t tell you who owns that property
3. Don’t expect due diligence to be really diligent. We’ll do our best, but don’t ask us to hack any more Panama lawyers.